Investing.com — National Grid (NGG) raised its full-year earnings-growth guidance on Thursday after first-half underlying earnings per share beat expectations, helped by higher revenue from its UK electricity transmission business, though operating profit missed forecasts and record investment drove a sharp increase in capital spending and debt.
The British energy network operator said it expects underlying EPS to grow by 15-16% in 2026/27 from a 2025/26 baseline of 78 pence, driven by higher allowed revenue under its new price control.
National Grid stock rose almost 2% before the bell on Thursday.
The company reported underlying EPS of 36.5 pence for the six months to Sept. 30, up 22% from 29.8p a year earlier and above the 35.1p analysts had expected, according to company-compiled consensus.
UK Electricity Transmission operating profit rose to £1.23 billion, beating the £1.20 billion forecast, as underlying net revenue increased by £441 million under the new regulatory price control.
The EPS increase also reflected a lower underlying tax rate of 7.3%, down from 11.3%, and a fair value gain in joint ventures. The lower tax rate was mainly driven by higher capital investment in UK regulated businesses, a larger deferred-tax exclusion and a change in profit mix.
Statutory pre-tax profit more than doubled to £1.73 billion from £826 million, reflecting favourable timing effects and one-off gains, including a revaluation of its NG Partners portfolio. Statutory EPS rose to 26.9p from 12.6p.
Capital investment reached a record £6.7 billion, up 33% from £5.05 billion a year earlier, reflecting higher spending on onshore and offshore transmission projects.
Net debt rose to £48.6 billion at Sept. 30 from £44.2 billion in March, although it was below the £50 billion consensus. The increase reflected capital expenditure and a £941 million investment in Joulent, partly offset by £4.1 billion in operating cash inflows.
National Grid said it expects capital investment of about £13.5 billion in 2026/27 and net debt to increase by around £4 billion, taking regulatory gearing to about 65% from 61% in March 2026. Net finance costs are expected to rise by about £300 million.
The company also forecast a tax rate of around 12% and a roughly £100 million reduction in National Grid Ventures operating profit following the sale of Grain LNG.
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
